Dave Says: Land Investment

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How much of our savings should we put toward land investment?

Dear Dave,

My wife and I make about $85,000 a year. We’re debt-free, and we have no kids. We’d like to start saving money to buy some land in the near future. What percentage of our savings should we put toward this?

Dennis

Dear Dennis,

I don’t know if there’s necessarily a specific percentage for this kind of thing. Since you guys are already debt-free you need to make sure that you’ve got a fully-loaded emergency fund of three to six months of expenses in place, along with retirement funding. In your case, anything else you have sitting around is simply wealth.

If you’ve got $50,000 sitting in a savings account in addition to these things, and you’d rather have $50,000 worth of dirt instead of a bank account, I’m cool with that. It’s really more a matter of ratios than percentages.